The Telegraph
Thursday , March 27 , 2014
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Stiff terms for Roy bail

New Delhi, March 26: The Supreme Court has agreed to release Subrata Roy, head of the Sahara conglomerate, from custody, but only after the group deposits Rs 10,000 crore in cash and bank guarantees.

Roy was arrested on February 28 and has been held in a Delhi jail since March 4 after failing to appear at a contempt hearing in a long-running legal battle between the group and market regulator Sebi over the refund of money to investors in questionable bonds.

In its ruling on Wednesday, the Supreme Court ordered Sahara to deposit Rs 5,000 crore in cash with the court as well as provide bank guarantees for another Rs 5,000 crore to Sebi.

“On compliance, the contemnors be released forthwith and the amount deposited be released to Sebi,” a bench of justices K.S. Radhakrishnan and J.S. Khehar said.

The bench, however, said it had agreed to grant interim bail to Roy and two directors — Ravi Shankar Dubey and Ashok Roy Choudhary — only to facilitate the Sahara chief to raise the money which is to be deposited with Sebi.

“We make it clear that this order is passed in order to facilitate the contemnors to further raise the balance amount so as to comply with the court’s orders,” it said.

Sahara officials did not immediately comment on the court’s ruling.

Senior counsel Ram Jethmalani, appearing for Roy, told the court he would respond to the offer on Thursday, after seeking instructions from his clients.

Sahara’s lawyers asked the court to give the group access to some of its bank accounts that have been seized by authorities and expect a decision at a hearing on Thursday, Keshav Mohan, one of the lawyers representing Sahara, said.

He declined to comment further.

The same bench had on Tuesday rejected Sahara’s fresh proposal to deposit over Rs 20,000 crore with market regulator Sebi in installments by March 2015.

The group, in its proposal, had assured the apex court that it would deposit Rs 2,500 crore within three working days and pay three instalments of Rs 3,500 crore each at the end of June, September, December and the remaining Rs 7,000 crore by March 31, 2015.

The core business of Sahara, which owns New York’s Plaza Hotel and London’s Grosvenor House and is the former main sponsor of India’s national cricket team, includes selling financial products, largely to small investors in towns and rural areas.

On August 31, 2012, the court had declared two such investment schemes run by Sahara India Real Estate Corp Ltd and Sahara India Housing Investment Corp Ltd as illegal and asked Sahara to return the money with interest to investors through Sebi.

According to Sebi, instead of complying with the August 31 apex court order to refund the money, the company has been dodging investors.

While Sahara says it has repaid most investors and its total liability was less than the amount it has already deposited with the securities regulator, Sebi and the court disputed that.

The court had asked Sahara to come up with a concrete and acceptable proposal to repay the money, while ordering its chief to be held in jail. Roy has not been charged with any crime.